Citi to sell consumer banking units in Malaysia, Indonesia, Thailand and Vietnam to UOB Group

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A Citibank subdivision successful New York, U.S., connected Friday, Jan. 7, 2022.

Victor J. Blue | Bloomberg | Getty Images

Citigroup volition merchantability its user banking businesses successful Indonesia, Malaysia, Thailand and Vietnam to Singapore's United Overseas Bank, the banks announced Friday.

As portion of the deal, UOB said it volition get Citi's unsecured and secured lending portfolios, wealthiness absorption and retail deposit units that marque up its user banking concern successful the 4 markets.

UOB, which has a salient beingness successful Southeast Asia, volition wage Citigroup for the nett assets of the acquired businesses arsenic good arsenic a premium of $690 million.

Citi's user concern had an aggregate nett worth of astir 4 cardinal Singapore dollars ($2.97 billion) and a lawsuit basal of astir 2.4 cardinal arsenic of June 30, 2021, UOB said.

The projected transaction is expected to beryllium financed done the bank's excess superior and is estimated to trim UOB's communal equity tier 1 ratio — which measures a bank's superior successful narration to its assets — by 70 ground points to 12.8%, UOB said. It added that the interaction connected the CET1 ratio is not expected to beryllium worldly and volition stay wrong regulatory requirements.

The merchantability of these 4 user markets, on with our antecedently announced transactions, show our consciousness of urgency to execute our strategical refresh.

"UOB believes successful Southeast Asia's semipermanent imaginable and we person been disciplined, selective and diligent successful seeking the close opportunities to grow," Wee Ee Cheong, lawman president and main enforcement serviceman astatine UOB, said successful a statement.

Approximately 5,000 Citi user banking unit and supporting employees successful the 4 markets are expected to transportation to UOB erstwhile the projected woody closes.

"The acquired business, unneurotic with UOB's determination user franchise, volition signifier a almighty operation that volition standard up UOB Group's concern and beforehand our presumption arsenic a starring determination bank," Wee said.

UOB shares ticked higher by 1.23% Friday afternoon, pursuing the announcement.

Citi said it expects the woody to merchandise astir $1.2 cardinal of allocated tangible communal equity and an summation to tangible communal equity of implicit $200 million. Tangible communal equity is simply a measurement utilized to measure a fiscal institution's quality to woody with imaginable losses.

The New York-based slope volition inactive clasp power of its organization businesses successful Indonesia, Malaysia, Thailand and Vietnam.

Citigroup CEO Jane Fraser said past twelvemonth that the slope volition exit retail operations successful 13 countries extracurricular the United States to amended returns. Many of those markets are successful Asia-Pacific, including Australia, China, India and Indonesia.

"The merchantability of these 4 user markets, on with our antecedently announced transactions, show our consciousness of urgency to execute our strategical refresh," Citi CFO Mark Mason said successful a connection connected Friday.

Citi expects the woody to beryllium completed betwixt mid-2022 and aboriginal 2024, depending connected the advancement and result of regulatory approvals.

Last year, Citi said it agreed to merchantability its user banking businesses successful the Philippines and Australia and was winding down user banking operations successful South Korea.